English
 
Privacy Policy Disclaimer
  Advanced SearchBrowse

Item

ITEM ACTIONSEXPORT

Released

Journal Article

Phasing out support schemes for renewables in neighbouring countries: An agent-based model with investment preferences

Authors
/persons/resource/1448

Melliger,  Marc André
IASS Institute for Advanced Sustainability Studies Potsdam;

Chappin,  Emile
External Organizations;

External Ressource
No external resources are shared
Fulltext (public)
There are no public fulltexts stored in IASSpublic
Supplementary Material (public)
There is no public supplementary material available
Citation

Melliger, M. A., Chappin, E. (2022): Phasing out support schemes for renewables in neighbouring countries: An agent-based model with investment preferences. - Applied energy, 305, 117959.
https://doi.org/10.1016/j.apenergy.2021.117959


Cite as: https://publications.iass-potsdam.de/pubman/item/item_6001256
Abstract
Support schemes have been central to the expansion of renewable electricity globally and in the European Union. As technologies mature, individual member states may decide to phase out these policies. While previous research has shown that such policy changes affect investors’ decisions, we investigate how they affect pathways and electricity prices by simulating investment decisions in an agent-based model in two case countries. This paper contributes and applies an adapted investment decision algorithm that incorporates empirically observed technology and return preferences and is calibrated by return observations. The new algorithm yields more refined and stronger effects compared to its predecessor. Results show that the phase-out of auctions in Germany and the Netherlands slows down their deployment of renewable capacity by up to ∼60% and ∼35%, respectively. With the exception of photovoltaics and onshore wind projects in the Netherlands, the targeted capacities can only be reached by continuing support in both countries. Furthermore, ending support in a large country like Germany leads to higher electricity prices and fosters a market-driven but insufficient capacity expansion in smaller neighbours like the Netherlands. As the electricity grids in many countries are strongly interconnected, such cross-border effects are of international relevance. Our findings suggest that continued auctions may be necessary and that countries should coordinate policy changes to stay on track for meeting their renewables targets.